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Double blow for Dar es Salaam businesswoman in Sh314 million tax case

Wednesday March 03 2021
Tax pic

Tanzania Revenue Authority’s Commissioner General Edwin Mhede briefs journalists on the revenue collection trends for the 2020/21 fiscal year in Dar es Salaam. At left is Finance and Planning ministry’s permanent secretary, Dotto James. PHOTO | FILE

By Bernard James

Dar es Salaam. A City businesswoman Khofu Mlewa has lost a five-year court battle for a Sh264 million compensation from the Tanzania Revenue Authority (TRA) that had in 2014 seized and auctioned goods she reportedly illegally imported.

The latest decision of the Court of Appeal to dismiss her appeal on the matter is a double blow to the trader, who had already paid Sh48.3 million penalties for release of her goods, only to learn they had been auctioned.

 The highest court of the land has confirmed decision of the High Court to dismiss the businesswoman’s case, saying the court was not a proper forum to hear the tax dispute.

 The court sustained a preliminary objection by TRA that the case before the High Court was a civil action that was supposed to be heard by the Tax Revenue Appeals Board (Trab).

Root of the dispute It all started in 2014 when the taxman seized a huge quantity of uncustomed goods that had been imported by the businesswoman and deposited them in a customs warehouse.

 However, after consultations and several correspondences between the two, the woman admitted in 2015 to have not declared the goods to custom agents against section 200 (d) (iii) of the East African Community Customs Management

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Act (EACCMA), 2004. Acting on the admission, the Commissioner for Customs and Excise ordered the trader to pay duties and penalties of Sh48.3 million before the goods could be given back to her. She paid the amount on January 25, 2016 but upon presenting proof of payment to the Customs Ware- house officials, she learnt that the goods had been sold on January 20, 2016.

Aggrieved by the move, Mlewa brought a suit in June 2017 against TRA and the Commissioner for Customs and Excise, claiming for the payment of Sh264.4 million being the value of the goods. She also claimed interests on the money as well as on a Sh50 million loan she had taken to pay the duties and penalties.

TRA’s defence TRA blamed the appellant for failing to pay the duties and penalties in time as for the seizure order. The taxman then advertised and auctioned the goods on January 20, 2016 as overstayed imports.

 TRA also claimed Ms Mlewa paid for the duties and penalties a day after the auction while aware that the goods had already been sold.

Jurisdiction crisis As part of their defence, TRA and the Commissioner for Customs and Excise objected to the jurisdiction of the High Court, contending that the court had no jurisdiction to determine the dispute as per section 7 of the Tax Revenue Appeals Act.

According to the Act, the Tax Revenue Appeals Board have the sole original jurisdiction in all proceedings of a civil nature in respect of disputes arising from revenue laws administered by TRA. The High Court went on to dismiss the suit in November, 2018.

Aggrieved, Ms Mlewa moved the Court in 2019 where she challenged the holding of the High Court that it has no jurisdiction to hear her case. Last straw But in their decision last Friday, the panel of three Justices of the Court of Appeal comprising of Chief Justice Prof Ibrahim Juma, Gerald Ndika and Mwanaisha Kwariko upheld decision of the High Court, saying it was not a proper forum to entertain the case.

“All considered, we are of the respectful view that the High Court correctly declined to take cognizance of the appellant’s recourse to it for want of jurisdiction in view of the express provision of section 7 of the East African Community Customs Management Act,” said the judges.

The court reiterated that the appellant’s claim arising from administration of the EACCMA was an action of civil nature only justiciable in the Trab.

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